Independent Treasury Act [1847] - History

Independent Treasury Act [1847] - History


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An Act to provide for the better Organization of the Treasury, and for the Collection, Safe keeping, Transfer, and Disbursement of the public Revenue.

Be it enacted . ., That the rooms prepared and provided in the new treasury building at the seat of government for the use of the treasurer of the United States, his assistants, and clerks, and occupied by them, and also the fireproof vaults and safes erected in said rooms for the keeping of the public moneys in the possession and under the immediate control of said treasurer, and such other apartments as are provided for in this act as places of deposit of the public money, are hereby constituted and declared to be the treasury of the United States. And all moneys paid into the same shall be subject to the draft of the treasurer, drawn agreeably to appropriations made by law.

[Sections 2-4 provide that the mint at Philadelphia, the branch mint at New Orleans, and the places provided for at New York, Boston, Charleston, and St. Louis, under the act of July 4; I840, for the use of receivers general of public money, shall be places of deposit. ]

SEC. 5. And be it further enacted, That the President shall nominate, and by and with the advice and consent of the Senate appoint, four officers to be denominated "assistant treasurers of the United States," which said officers shall hold their respective offices for the term of four years unless sooner removed therefrom; one of which shall be located at the city of New York . .. ; one . at the city of Boston . at the city of Charleston . ; and one other at St. Louis . .

SEC. 6. And be it further acted, That the treasurer of the United States, the treasurer of the mint of the United States, the treasurers, and those acting as such, of the various branch mints, all collectors of the customs, all surveyors of the customs acting also as collectors, all assistant treasurers, all receivers of public moneys at the several land offices, all postmasters, and all public officers of whatsoever character, be, and they are hereby, required to keep safely, without loaning, using, depositing in bank, or exchanging for other funds than as allowed by this act, all the public money collected by them, or otherwise at any time placed in their possession and custody, till the same is ordered, by the proper department or officer of the government, to be transferred or paid out; and when such orders for transfer or payment are received, faithfully and promptly to make the same as directed, and to do and perform all other duties as fiscal agents of the government which may be imposed by this or any other acts of Congress, or by any regulation of the treasury department made in conformity to law; and also to do and perform all acts and duties required by law, or by direction of any of the Executive departments of the government, as agents for paying pensions, or for making any other disbursements which either of the heads of these departments may be required by law to make, and which are of a character to be made by the depositories hereby constituted, consistently with the other official duties imposed upon them.

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SEC. 9. And be it further enacted, That all collectors and, receivers of public money, of every character and description, within the District of Columbia, shall, as frequently as they may be directed by the Secretary of the Treasury, or the Postmaster general so to do, pay over to the treasurer of the United States, at the treasury, all public moneys collected by them, or in their hands; that all such collectors and receivers of public moneys within the cities of Philadelphia and New Orleans shall, upon the same direction, pay over to the treasurers of the mints in their respective cities, at the said mints, all public moneys collected by them, or in their hands; and that all such collectors and receivers of public moneys within the cities of New York, Boston, Charleston, and St. Louis, shall, upon the same direction, pay over to the assistant treasurers in their respective cities, at their offices, respectively, all the public moneys collected by them, or in their hands, to be safely kept by the said respective depositories until otherwise disposed of according to law and it shall be the duty of the said Secretary and Postmaster general respectively to direct such payments by the said collectors and receivers at all the said places, at least as often as once in each week, and as much more frequently, in all cases, as they in their discretion may think proper.

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SEC. I8. Be it further enacted, That on . [January 1, I847] . ., and thereafter, all duties, taxes, sales of public lands, debts, and sums of money accruing or becoming due to the United States, and also all sums due for postages or otherwise, to the general post office department, shall be paid in gold and silver coin only, or in treasury notes issued under the authority of the United States.... SEC. I9. And be it further enacted, That on . [April I, I847] . ., and thereafter, every officer or agent engaged in making disbursements on account of the United States, or of the general post-office, shall make all payments in gold and silver coin, or in treasury notes, if the creditor agree to receive said notes in payment.


Independent Treasury System and other Domestic Policies

Image shows important members of the Democratic Party carrying a cloven hooved Polk out on a stretcher with an empty box next to him labeled "Sub Treasury".

While Polk was attempting to fulfill America’s manifest destiny in the Western part of the Union, in Washington he was also fulfilling his promises to establish an Independent Treasury and reduce tariffs.

The Independent Treasury System in question was first put forth by Martin Van Buren under President Jackson was dismantled by the Tyler administration. Following in Jackson’s footsteps, Polk disliked the idea of a Bank of the United States and wanted the Nation’s funds to be under an Independent Treasury. 1 The system his administration created did live up to this ideal. Though the Whigs did not support it, in 1846, Congress passed the Independent Treasury Act. The Act established a Treasury building that would contain public revenue and disperse it to cities that had their own sub-treasury buildings that were not under the control of a state or private bank. The Independent Treasury System was in place for the rest of the 19th century and ended in 1913 with the creation of the Federal Reserve. 2

Also in 1846, the tariff rates were lowered as part of the Walker Tariff Act. The process of passing the bill was very difficult as it was quite contentious. The Senate was deadlocked, having the tie be broken by Vice President Dallas. This course of action by Dallas was surprising as Dallas hailed from the protectionist state of Pennsylvania, meaning its constituents were not in support of a lower tariff but instead wanted higher barriers to trade. He believed that his best course of action was to support the Polk administration with this vote. 3 At about 25%, the Walker Tariff would go on to bring in more revenue than the prior tariff and also increase trade with Britain. 4

In some of his last acts as president, Polk helped to spark the California Gold Rush and signed a bill that established the Department of the Interior. The former was due to his authoritative statement to Congress about the fact that gold had been found in the state. This gave people no room for doubt as to whether or not California harbored gold and the Rush soon began. The latter was begrudgingly signed as he did not support the extension of the executive office’s function but could not find a constitutional reason to veto it. 5

1 Polk, James K. Inaugural Address, March 4, in Polk’s hand . March 4, 1845. Manuscript/MixedMaterial. https://www.loc.gov/item/pin1603/ .

2 Merry, Robert W. A Country of Vast Designs: James K. Polk, the Mexican War, and the Conquest of the American Continent . (New York: Simon & Schuster Paperbacks, 2011), 273-277.

4 F. W. Taussig, The Tariff History of the United States with an Introd (Capricorn Books, 1931), 124-154.

5 Borneman, Walter R. Polk: the Man Who Transformed the Presidency and America . (New York: Random House Trade Paperbacks, 2009), 334-345.


TOPN: Independent Treasury Act of 1846

Laws acquire popular names as they make their way through Congress. Sometimes these names say something about the substance of the law (as with the '2002 Winter Olympic Commemorative Coin Act'). Sometimes they are a way of recognizing or honoring the sponsor or creator of a particular law (as with the 'Taft-Hartley Act'). And sometimes they are meant to garner political support for a law by giving it a catchy name (as with the 'USA Patriot Act' or the 'Take Pride in America Act') or by invoking public outrage or sympathy (as with any number of laws named for victims of crimes). History books, newspapers, and other sources use the popular name to refer to these laws. Why can't these popular names easily be found in the US Code?

The United States Code is meant to be an organized, logical compilation of the laws passed by Congress. At its top level, it divides the world of legislation into fifty topically-organized Titles, and each Title is further subdivided into any number of logical subtopics. In theory, any law -- or individual provisions within any law -- passed by Congress should be classifiable into one or more slots in the framework of the Code. On the other hand, legislation often contains bundles of topically unrelated provisions that collectively respond to a particular public need or problem. A farm bill, for instance, might contain provisions that affect the tax status of farmers, their management of land or treatment of the environment, a system of price limits or supports, and so on. Each of these individual provisions would, logically, belong in a different place in the Code. (Of course, this isn't always the case some legislation deals with a fairly narrow range of related concerns.)

The process of incorporating a newly-passed piece of legislation into the Code is known as "classification" -- essentially a process of deciding where in the logical organization of the Code the various parts of the particular law belong. Sometimes classification is easy the law could be written with the Code in mind, and might specifically amend, extend, or repeal particular chunks of the existing Code, making it no great challenge to figure out how to classify its various parts. And as we said before, a particular law might be narrow in focus, making it both simple and sensible to move it wholesale into a particular slot in the Code. But this is not normally the case, and often different provisions of the law will logically belong in different, scattered locations in the Code. As a result, often the law will not be found in one place neatly identified by its popular name. Nor will a full-text search of the Code necessarily reveal where all the pieces have been scattered. Instead, those who classify laws into the Code typically leave a note explaining how a particular law has been classified into the Code. It is usually found in the Note section attached to a relevant section of the Code, usually under a paragraph identified as the "Short Title".

Our Table of Popular Names is organized alphabetically by popular name. You'll find three types of link associated with each popular name (though each law may not have all three types). One, a reference to a Public Law number, is a link to the bill as it was originally passed by Congress, and will take you to the LRC THOMAS legislative system, or GPO FDSYS site. So-called "Short Title" links, and links to particular sections of the Code, will lead you to a textual roadmap (the section notes) describing how the particular law was incorporated into the Code. Finally, acts may be referred to by a different name, or may have been renamed, the links will take you to the appropriate listing in the table.


Independent Treasury Act [1847] - History

Confederate Government

Structure

Services

Registered Companies

Treasury Act

:The Department of the Treasury of the Confederacy of Independent Systems shall be established.
::The Treasury of the Confederacy shall be charged with the receipt and custody of all funds owned and debited to the Confederacy of Independent Systems.
::The Treasury of the Confederacy shall be headed by the Treasurer of the Confederacy.
::The Treasury is responsible for maintaining documents, records and receipts.
::Official documents, records and receipts of the Treasury must be provided publicly for the Confederate Senate
::The Treasury is responsible to prepare, and digest plans for the improvement and management of the of the revenue of the Confederacy.

:The Treasurer shall manage the shared funds of the Confederacy of the Independent Systems in a personal fund, or in a shared bank account.
::No persons who are not a Senator may have access to any shared bank account established.
::The Senate must be aware, at all times, where the Confederacy's funds are being held.
::The Treasurer is responsible for the distribution of the Confederacy's funds through the will of the Senate.
::The officer of the Treasurer of the Confederacy of Independent Systems is an impeachable office.
::The Treasurer will be made responsible to provide a quarterly report on expenses, incomes and balances to the Senate. This report will then be made public to the rest of the CIS general public.
::The Treasurer will be responsible for recording and tracking all CIS membership taxes charged on a monthly basis. This Tax rate is currently set at 10% per month of a CIS member organization's facility generated incomes. This particular rate is reviewable at the end of each term when a new Head of State, Supreme Commander, Treasurer is elected.

:The Treasurer must be duly elected by the Confederate Senate.
::The election begins by the selection of nominees, who require at least one nomination and one second from the senate.
. Senators may not nominate themselves
. Nominees must be members of the senate.
::Nominated Senators will be given the opportunity to make a speech and respond to any questions made by the senate members.
::The senators then vote on the nominee that they wish to become the Treasurer of the Confederacy.
::In order for someone to become Treasurer of the Confederacy, they must receive a majority of the vote, that majority must consist of at least 2/3rds of the eligible voters participating in the vote.
::If no nominee receives a majority of the vote, then a new election is called.
. In the case of a tie, Head of State will break the tie.
::Once elected the Treasurer of the Confederacy serves a term of eight months in total.

:No money shall be drawn from the Treasury but in consequence of appropriations made by law.
::Appropriations may be made within, or separate from, bills, acts, and laws establishing programs and/or departments.
::Appropriations may be set as a percentage, or a fixed annual amount.
::No greater than 80% of the Confederate Treasury may be appropriated.
::All appropriations must be reviewed, and reaffirmed annually.


Panic of 1837

Summary and Definition of Panic of 1837
Definition and Summary: The Panic of 1837 was a crisis in financial and economic conditions in the nation following changes in the banking system initiated by President Andrew Jackson and his Specie Circular that effectively dried up credit. Other causes of the Panic of 1837 included the failure of the wheat crop, a financial crisis and depression in Great Britain that led to restrictive lending policies. President Martin Van Buren was blamed for the Panic of 1837 and proposed the system for the retaining government funds in the United States Treasury and its sub-treasuries to address the situation but met with strong opposition by the Whigs, led by Henry Clay.

Panic of 1837 for kids: Background History of the Panic of 1819
The Panic of 1837 occured just 5 weeks into the presidency of Martin Van Buren. The events leading to the Panic of 1837 took place during President Andrew Jackson's term of office, and even before his presidency. The earlier Panic of 1819 was caused by the bad management of the Second Bank of the United States and had resulted in serious hardship for the people in the two year depression that followed.

Panic of 1837 for kids: Background History of the Specie Circular
There were massive amounts of banknotes in circulation without deposits, or gold or silver to cover them. Andrew Jackson issued the Specie Circular at the end of his presidency to end reckless land speculation. The Specie Circular demanded that payments for the purchase of public lands were made exclusively in gold or silver. It also dried up credit, leading to the Panic of 1837.

Causes of the Panic of 1837: Problems with Trade
Just to add to the financial and economic crisis of the nation the 1836 wheat crop had failed causing hardship for the northern farmers in 1837. The South also suffered because there was a depression in Great Britain and the sale of cotton dropped dramatically. The British depression led to restrictive lending policies by Great Britain that curtailed the flow of money and credit to the United States.

Panic of 1837 for kids: Deposit and Distribution Act of 1836
The Second Bank had been closed. The government had paid their debts. The government needed a plan to distribute surplus government money - it had to be stored somewhere. The plan was to loan the surplus revenues to the states in proportion to their electoral votes - three payments were made to the states. The Deposit and Distribution Act of 1836 placed federal revenues in various banks across the nation.

Causes of the Panic of 1837: Martin Van Buren and the chain of events
The Panic of 1837 gripped the country just 5 weeks after Martin Van Buren was made president - he got the blame for the panic and given the nickname 'Martin Van Ruin'. This is the chain of events and causes that led to the Panic of 1837

● When the Specie Circular was issued, people who held paper money immediately went to the banks to get gold and silver in exchange for their paper money in order to pay for the lands bought from the government
● The government had to borrow money and call in loans to pay its own necessary expenses
● The banks were obliged to sell their property and to demand payment of money due them
● People wanted to sell but few were able to buy
● Credit dried up, profits plummeted
● 343 banks closed (out of 850 banks), another 62 banks partially failed

Effects of the Panic of 1837
The effects of the Panic of 1837 were:

● Foreclosures and Bankruptcies
● Factories, mills and mines were closed
● Unemployment soared
● Bread riots broke out

Martin Van Buren and the Panic of 1837: "What should be done with the government's money?"
President Van Buren was faced with finding ways to resolve the financial crisis. The immediate question to be answered was "What should be done with the government's money?"

● There was no national bank and no one would consider depositing it with the state banks
● Henry Clay and his supporters favored the establishment of a new United States Bank
● President Van Buren opposed a new national bank - he had shared Andrew Jackson's distrust in the first national banks
● Martin Van Buren therefore proposed the establishment of an independent treasury that would be isolated from all banks

Panic of 1837 for kids
The info about the Panic of 1837 provides interesting facts and important information about this important event that occured during the presidency of the 8th President of the United States of America.

Martin Van Buren and the Panic of 1837: The Independent Treasury and the Sub-Treasuries
Martin Van Buren's plans for an independent treasury were based on the idea of building vaults for storing money in Washington and in the leading cities of the nation. The main storehouse (the Treasury) was to be built in Washington and other vaults (sub-treasuries) were to be established in the other cities. The collectors of customs would pay the money collected by them into each of the sub-treasuries. By using this system the government would become independent of the general business affairs of the nation. The Deposit and Distribution Act of 1836 placed federal revenues in various banks across the nation

Martin Van Buren and the Panic of 1837: Opposition to the Independent Treasury
There was considerable opposition to the idea of the treasury.

● The Independent Treasury Act failed to pass the House of Representatives in 1837
● The Independent Treasury Act failed to pass the House of Representatives in 1838
● The Independent Treasury Act failed to pass the House of Representatives in 1839

The Independent Treasury Act was passed by Congress in 1840 but there were many requirements to put the plan into effect and before the Treasury system was in full working order Martin Van Buren was no longer President and the nickname 'Martin Van Ruin' stuck. In 1841 the Whigs, who wanted a new central bank, repealed the law. The Whigs plans to establish a new central bank failed due to a veto by President John Tyler on constitutional grounds. The Democrats won the election of 1844 and re-established the Independent Treasury System in 1846 in the Independent Treasury Act of August 1846 during the presidency of James Polk.

Significance of the Panic of 1837
The significance of the Panic of 1837 was:

● Martin Van Buren was blamed for the Panic of 1837 and the economic depression that followed it. He was not re-elected president
● The recession continued for nearly 7 years
● The system of State banks never fully recovered
● The system for the retaining government funds in the United States Treasury and its sub-treasuries continued to exist from 1846 to 1921

The Panic of 1837 for kids
The Panic of 1837 was one of a series of financial crisis to cripple the economy of the United States - refer to the Panic of 1819 , the Bank War and the Panic of 1857 for additional facts and information.

Panic of 1837 for kids - President Martin Van Buren Video
The article on the Panic of 1837 provides an overview of one of the Important issues of his presidential term in office. The following Martin Van Buren video will give you additional important facts and dates about the political events experienced by the 8th American President whose presidency spanned from March 4, 1837 to March 4, 1841.

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Independent Treasury System: Creation of the System

In 1840 legislation for an independent treasury was passed and approved by the President however, the following year the Whigs repealed the law. The intention of the Whigs was to establish a new central bank, but the objections of President John Tyler on constitutional grounds prevented the creation of another Bank of the United States. The Democrats won the presidential election of 1844, and measures were inaugurated to restore the Independent Treasury System.

The act of Aug., 1846, provided that the public revenues be retained in the Treasury building and in subtreasuries (see subtreasury) in various cities. The Treasury was to pay out its own funds and be completely independent of the banking and financial system of the nation all payments by and to the government, moreover, were to be made in specie. The separation of the Treasury from the banking system was never completed, however the Treasury's operations continued to influence the money market, as specie payments to and from the government affected the amount of hard money in circulation.

The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.


U.S. Department of the Treasury

The management of the money resources of the United States has always been the primary function of the Department of the Treasury.

Whether it is regulating national banks, determining international economic policy, collecting income and excise taxes, issuing securities, reporting the government's daily financial transactions, or manufacturing coins or bills for circulation, the one concern that still ties together the activities of the Department of the Treasury is money.

Though formally established as an executive department by the First Session of Congress in 1789, many functions of the Department of the Treasury were being carried out even before the signing of the Declaration of Independence thirteen years earlier. Over the decades, the functions of the Department have expanded and grown more sophisticated to meet the needs of a developing nation.

Today, the Department of the Treasury remains the premier financial institution of the United States with a full-time agenda of accounting, revenue collection, money production, and economic policy formulation.


Dodd-Frank Today

Today, the “too much regulation” and “not enough regulation” sides of the debate over the Dodd-Frank Act are still a source of contention.

In February 2017, President Donald Trump issued an executive order that instructed regulators to review the provisions in the Dodd-Frank Act and compose a report outlining possible reforms.

The Republican-led Congress made several efforts in 2017 and 2018 to roll back some of the consumer-protection provisions found in the Dodd-Frank Act.

While the Dodd-Frank Act has undoubtedly changed the way financial institutions operate in the United States, it’s uncertain just how long the law will stay in full effect.


Who opposed the Independent Treasury Act?

Independent Treasury. This Act required that all federal funds be deposited in treasuries independent of private banks. It also mandated that all debts due to the federal government be paid in gold, silver, or treasury notes.

Likewise, how did the establishment of the independent treasury system affect the US economy? Although the Independent Treasury did restrict the expansion of credit, it also posed a new set of economic problems. In periods of prosperity, revenue surpluses accumulated in the Treasury, reducing hard money circulation, tightening credit, and restraining inflation of trade and production.

Likewise, who was the first person to consider the establishment of an independent treasury system?

In June 1840 Congress established an Independent Treasury System, but the first act of the Whig administration of President William Henry Harrison in March 1841 was to repeal the bill.


Independent Treasury Act [1847] - History

INDEPENDENT TREASURY SYSTEM

Independent Treasury System, in U.S. history, system for the retaining of government funds in the Treasury and its subtreasuries independently of the national banking and financial systems. In one form or another, it existed from the 1840s to 1921.

Origins of the System

After President Andrew Jackson vetoed the bill to recharter the Bank of the United States, he transferred (1833) government funds from the bank to state banks (the “pet banks”). Those banks, however, used the funds as a basis for speculation, which was already rampant and was soon to be further increased by the distribution of the federal surplus among the states. The situation was brought to a head by Jackson’s issue of the Specie Circular (1836), which led to a drain on the “pet banks” and their collapse in the Panic of 1837. President Martin Van Buren then proposed that an independent treasury be set up that would be isolated from all banks. The proposal met considerable opposition and failed to pass the House of Representativesin 1837 and again in the sessions of 1837–38 and 1838–39.

Creation of the System

In 1840 legislation for an independent treasury was passed and approved by the President however, the following year the Whigs repealed the law. The intention of the Whigs was to establish a new central bank, but the objections of President John Tyler on constitutional grounds prevented the creation of another Bank of the United States. The Democrats won the presidential election of 1844, and measures were inaugurated to restore the Independent Treasury System.

The act of Aug., 1846, provided that the public revenues be retained in the Treasury building and in subtreasuries (see subtreasury) in various cities. The Treasury was to pay out its own funds and be completely independent of the banking and financial system of the nation all payments by and to the government, moreover, were to be made in specie. The separation of the Treasury from the banking system was never completed, however the Treasury’s operations continued to influence the money market, as specie payments to and from the government affected the amount of hard money in circulation.

Problems and Its Demise

Although the independent Treasury did restrict the reckless speculative expansion of credit, it also tended to create a new set of economic problems. In periods of prosperity, revenue surpluses accumulated in the Treasury, reducing hard money circulation, tightening credit, and restraining even legitimate expansion of trade and production. In periods of depression and panic, when banks suspended specie payments and hard money was hoarded, the government’s insistence on being paid in specie tended to aggravate economic difficulties by limiting the amount of specie available for private credit.

The most serious weaknesses in the system were revealed during the Civil War under the pressures created by wartime expenditures, Congress passed the acts of 1863 and 1864 creating national banks. Exceptions were made to the prohibition against depositing government funds in private banks, and in certain cases payments to the government could be made in national bank notes.

After the Civil War, the independent Treasury continued in modified form, as each administration tried to cope with its weaknesses in various ways. Secretary of the Treasury Leslie M. Shaw (1902–7) made many innovations he attempted to use Treasury funds to expand and contract the money supply according to the nation’s credit needs. The Panic of 1907, however, finally revealed the inability of the system to stabilize the money market agitation for a more effective banking system led to the passage of the Federal Reserve Act in 1913. Government funds were gradually transferred from subtreasuries to district banks, and an act of Congress in 1920 mandated the closing of the last subtreasuries in the following year, thus bringing the Independent Treasury System to an end.

“Independent Treasury System.” Encyclopedia.com. Columbia UP, 12 October 2019.

Dodwell, D. W . Treasuries and Central Banks. London: P.S. King & Sons, 1934.

Kinley, D . The History, Organization, and Influence of the Independent Treasury of the United States. New York: Crowell, 1893. Internet Archive.

Kinley, D. The Independent Treasury of the United States.Washington: Government Print Office, 1910. Hathi Trust.

Studenski, P. and H. Krooss. Financial History of the United States. New York: McGraw Hill, 1952.


Watch the video: James Polk: Best Mullet Ever 1845 - 1849